Shree Ashtavinayak Cine Vision Limited
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C M Y K RED HERRING PROSPECTUS Dated: November 18, 2006 Please read Section 60B of the Companies Act, 1956 (100 % Book Built Issue) SHREE ASHTAVINAYAK CINE VISION LIMITED (Incorporated as “Shree Ashtavinayak Cine Vision Private Limited” on October 23, 2001 at Mumbai under the Companies Act, 1956 and converted into a public limited company as “Shree Ashtavinayak Cine Vision Limited” on June 25, 2004.) Registered Office: A-204/205, VIP Plaza, 2nd floor, Plot No.7, Block-B, Veera Industrial Estate, Off Andheri Link Road, Andheri (W), Mumbai 400053. (The Registered office of our Company was shifted from 33/34 First Floor, RNA Arcade, Crystal View, CHS, Lokhandwala Complex, Andheri (w), Mumbai 400053 to Ahinsa Dham, Building No.1, Opposite Sabkhuch Supermarket, Link Road Malad (w), Mumbai-400064 with effect from April 1, 2002. Subsequently it was shifted to 422, New Sonal Link Industrial Estate, Link Road, Building No.2, Malad (W), Mumbai -400064 with effect from January 9, 2004 and then to the present address with effect from June 9, 2005) Tel No: +91 22 67029630 Fax No: +91 22 67029634 e-mail: [email protected], Website: www.ashtavinayakindia.com Contact Person: Ms. Archana Andhare – Company Secretary – Phone. No. 022-67029630, e-mail: [email protected] PUBLIC ISSUE OF 37,28,000 EQUITY SHARES OF FACE VALUE OF RS.10/- EACH ISSUED AT A PRICE OF RS. []/- PER SHARE FOR CASH AT A PREMIUM AGGREGATING TO RS. [] LAKHS (“THE ISSUE”), INCLUDING PROMOTERS CONTRIBUTION OF 4,28,000 EQUITY SHARES OF FACE VALUE OF RS.10/- EACH AT A PRICE OF RS. []/- FOR CASH AT A PREMIUM AGGREGATING TO RS. []/- LAKHS AND NET ISSUE TO PUBLIC OF 33,00,000 EQUITY SHARES OF FACE VALUE OF RS.10/- EACH AT A PRICE OF RS. []/- AT A PREMIUM AGREEGATING TO RS. [] LAKHS (HEREIN AFTER REFERRED TO AS THE “NET ISSUE TO THE PUBLIC”) THE NET ISSUE TO THE PUBLIC WOULD CONSTITUTE 32.898% OF THE FULLY DILUTED POST ISSUE PAID UP CAPITAL OF THE COMPANY PRICE BAND: Rs. 140 TO Rs. 160 PER EQUITY SHARE OF FACE VALUE Rs. 10/- EACH ISSUE PRICE IS 14 TIMES OF THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND 16 TIMES OF THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND The Issue is being made through 100% Book Building Process, where at least 50% of the Net Issue to the Public shall be allocated on proportionate basis to Qualified Institutional Buyers (5% of the QIB portion shall be available for allocation on proportionate basis for Mutual Funds only). If atleast 50% of the Net Issue to the public cannot be allocated to QIB Bidders, than the entire application money will be refunded. Further not less than 15% of the Net Issue to the Public shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Net Issue to the Public shall be available for allocation to Retail Individual Investors on proportionate basis, subject to the valid bid received at or above the issue price. In case of revision in the Price Band, the Bidding period shall be extended for 3 additional working days after such revision, subject to the Bidding/Offer Period not exceeding 10 working days. Any revision in the Price Band, and the revised Bidding period, if applicable, shall be widely disseminated by notification to the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, by issuing a press release and by indicating the change on the websites of the websites of the Book Running Lead Manager and their terminals of the member of the Syndicate. RISK IN RELATION TO THE FIRST ISSUE This being the first Issue of the Equity Shares of Shree Ashtavinayak Cine Vision Limited (“the Company”), there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares of the Company is Rs. 10/- per share and the Issue Price is 14 times of the face value at the lower price band and 16 times of the value at the higher price band of the Equity Shares of the Company. The Issue Price (as has been determined and justified by the Book Running Lead Manager and the Company as stated herein under the paragraph ‘Basis for Issue Price’) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and / or sustained trading in the Equity Shares of the Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. Specific attention of the investors is invited to the section titled ‘Risk Factors’ beginning on page i of this Red Herring Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Red Herring Prospectus contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares offered through this Red Herring Prospectus are proposed to be listed on the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The in-principle approval of BSE and the NSE for the listing of our Equity Shares have been received pursuant to letters dated September 28, 2006 and October 04, 2006, respectively. BSE shall be the Designated Stock Exchange. IPO GRADING The Company has opted for Grading. CRISIL has assigned “IPO GRADE 2” to the Initial Public Offering of the Company. For more information on IPO Grading please refer to page no. 9 of this Red Herring Prospectus. Book Running Lead Manager to the Issue Registrar to the Issue Allianz Securities Limited Intime Spectrum Registry Limited 33, Vaswani Mansion, 6th Floor, C-13, Pannalal Silk Mills Compound, Dinshaw Vachha Road, LBS Marg, Bhandup (West), Mumbai 400 078 Opp. K.C. College, Churchgate, Mumbai – 400 020 Tel: +91-22-2596 0320 (9 Lines) Fax: +91-22-2596 0329 Tel: 022-22870580, Fax: 022-22870581 Email: [email protected] Email: [email protected] Website: www.intimespectrum.com Website: www.aslfinancial.com Contact Person: Mr. Sachin Achar Contact Person: Mr. Sunit Shangle BID / ISSUE PROGRAMME BID/ISSUE OPENS ON : December 14, 2006 BID/ISSUE CLOSES ON : December 20, 2006 C M Y K TABLE OF CONTENTS PAGE NO. SECTION I: GENERAL DEFINITIONS & ABBREVIATIONS a SECTION II: CERTAIN CONVENTIONS; USE OF MARKET DATA h FORWARD LOOKING STATEMENTS i RISK FACTORS i SECTION III: INTRODUCTION SUMMARY 1 SUMMARY OF FINANCIAL DATA 3 THE ISSUE 5 GENERAL INFORMATION 6 CAPITAL STRUCTURE OF THE COMPANY 13 OBJECTS OF THE ISSUE 19 BASIS FOR ISSUE PRICE 26 STATEMENT OF TAX BENEFITS 28 SECTION IV: ABOUT THE COMPANY INDUSTRY OVERVIEW 34 OUR BUSINESS 37 KEY INDUSTRY REGULATIONS AND POLICIES 52 HISTORY AND CERTAIN CORPORATE MATTERS 53 OUR MANAGEMENT 57 PROMOTERS 66 PROMOTER GROUP COMPANIES 68 RELATED PARTY TRANSACTIONS 70 SECTION V: FINANCIAL INFORMATION OF THE COMPANY FINANCIAL STATEMENTS OF THE COMPANY 74 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 97 SECTION VI: LEGAL AND OTHER INFORMATION LEGAL AND OTHER INFORMATION 108 GOVERNMENT APPROVALS 109 MATERIAL DEVELOPMENT 110 SECTION VII: OTHER REGULATORY AND STATUTORY DISCLOSURES 111 SECTION VIII: ISSUE RELATED INFORMATION TERMS OF THE ISSUE 119 ISSUE STRUCTURE 121 ISSUE PROCEDURE 123 SECTION IX: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF THE COMPANY 144 SECTION X: LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 152 SECTION XI: DECLARATION 154 SECTION - I DEFINITIONS AND ABBREVIATIONS Definitions Term Description Company or Our Company or Shree Ashtavinayak Cine Vision Limited, a public limited company Shree Ashtavinayak Cine incorporated under the Companies Act, 1956 Vision Limited “We” or “us” or “SACVL”and Unless the context otherwise require, refers to Shree Ashtavinayak Cine “our” Vision Limited Promoters Mr. Dhilin H. Mehta and Dahlia Traders Private Limited Conventional / General terms Terms Description AGM Annual General Meeting of Shree Ashtavinayak Cine Vision Limited AOA / Articles / Articles of Articles of Association of Shree Ashtavinayak Cine Vision Limited. Association Auditors The Statutory Auditors of the Company, viz. Khimji Kunverji & Co., Chartered Accountant Board of Directors / Board The Board of Directors of Shree Ashtavinayak Cine Vision Limited Companies Act The Companies Act, 1956, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Director(s) Director(s) of Shree Ashtavinayak Cine Vision Limited, unless otherwise specified Equity Shares Equity Shares of the Company of face value of Rs.